There has been a great deal of attention to the Hostess and Interstate baking company as they contemplated closing the entire operation that has manufactured the venerable trade-named products Wonder Bread, Ding Dongs, and of course, Twinkies. There has always been a joke that Twinkies were bomb-proof and would survive forever. But, they did have a useful shelf life: that is until this week when a bankruptcy court allowed Hostess to shut down operations completely. But, there are several aspects to the story that have only been reported minimally as the 80 year old company ceased manufacturing activities. Perhaps the most significant part of the saga is that 18,000 people will be out of a job when it seems that the economy will not support these employees for some time to come. But, the back-story has some serious questions that can only be answered by the participants in a very high stakes game.
First, it was widely reported that the Baker's union would rather lose their jobs than concede more pay and benefit cuts. And, while this seems like a "cut off your nose" moment, it has to be viewed in the context that the present CEO and past CEO's and the management team have payed themselves more than the profit margins would allow. And, that bankrupting the company would provide more money to the departing leadership of the company.
But, there is a more serious problem and that is Hostess failed to change any of its products as the consumer needs changed. The idea that you could continue to sell overly sweet products with virtually no nutritional value seems ludicrous at best. It reminds me of the Post Office failing to re-tool when they realized that email would be a serious threat to their business. The trend, as I see it, is that companies that are inflexible and work only to satisfy investors will fail, whether unions shops or not.
On a lighter Twinkies note, Rice University began the T.W.I.N.K.I.E.S project in 1995 to subject the product to some very bizarre tests. You can see the results here.
Meanwhile, I will be thinking about the 18,000 displaced employees who now have to face the changing world of commerce with an uncertain future... Ken
First, it was widely reported that the Baker's union would rather lose their jobs than concede more pay and benefit cuts. And, while this seems like a "cut off your nose" moment, it has to be viewed in the context that the present CEO and past CEO's and the management team have payed themselves more than the profit margins would allow. And, that bankrupting the company would provide more money to the departing leadership of the company.
But, there is a more serious problem and that is Hostess failed to change any of its products as the consumer needs changed. The idea that you could continue to sell overly sweet products with virtually no nutritional value seems ludicrous at best. It reminds me of the Post Office failing to re-tool when they realized that email would be a serious threat to their business. The trend, as I see it, is that companies that are inflexible and work only to satisfy investors will fail, whether unions shops or not.
On a lighter Twinkies note, Rice University began the T.W.I.N.K.I.E.S project in 1995 to subject the product to some very bizarre tests. You can see the results here.
Meanwhile, I will be thinking about the 18,000 displaced employees who now have to face the changing world of commerce with an uncertain future... Ken
RSS Feed